Personal expenses paid by company

[gismor]

Hello,

I own a company within the EU and I'm trying to understand how can I use the funds of the company to pay certain invoices that are at my personal name.

For example, for the rent of the apartment, I have a monthly bill to pay but this is at my personal name. How can I have the company to pay for it since the rent agency is not willing to change the invoice to the EU company because it is a foreign company

To my knowledge, the accountant need an invoice with the header of the company to register as expenses alternatively it will be registered as debt/loan to the owner (so me). Is it correct?

Thanks in advance

 

[Sols]

Generally speaking, you could claim it as an expense against the company. First you pay the invoice yourself and then the company pays you for it, after you file a an expense claim.

This is something you should ask your accountant to help arrange for you, since the exact details on the situation (such as jurisdictions involved, amount relative to turnover, VAT, et cetera) can affect whether you can claim it as tax deductible expense and to what degree.

 

[cyprusbanker]

You can only do that if you pay for something business related. Cars, lawn mower, Lobster and your wifes watch is not included here.

 

[gismor]

Generally speaking, you could claim it as an expense against the company. First you pay the invoice yourself and then the company pays you for it, after you file a an expense claim.

This is something you should ask your accountant to help arrange for you, since the exact details on the situation (such as jurisdictions involved, amount relative to turnover, VAT, et cetera) can affect whether you can claim it as tax deductible expense and to what degree.

The accountant told me that, even to claim an expense, the invoice has to be at the name of the company

 

[monkeyscrin]

The accountant told me that, even to claim an expense, the invoice has to be at the name of the company

Yes exaclty

 

[CaptK]

You need another company and bank account. You get an invoice from them and the make payment there. Then pay your landlord.

 

[gismor]

You need another company and bank account. You get an invoice from them and the make payment there. Then pay your landlord.

Not sure I understand.

Do you mean that I should setup another company (company B) to bill my own company (company A), then company B will pay my landlord?

 

[CaptK]

Yes, I don't know how easy it is where you are but it can be a sole trader or if you know any estate agents who can help.

 

[khinkali]

The accountant told me that, even to claim an expense, the invoice has to be at the name of the company

This varies by country. When I worked in Thailand the accountants were strict about even a lunch receipt having the company name. But they seemed quite lax in their definition of allowable expenses.

UK accounts can include deductible invoices issued to directors and even employees, but audits are very strict on whether each payment is a legitimate deductible expense of the business. The rules are different for VAT and corp tax.

For example, for the rent of the apartment

You need local advice for your jurisdictions. If you live in the apartment then maybe you can deduct the expense in the offshore company as a salary payment where you're living.

 

[MagicMatt]

One simple solution is to photocopy the invoice and change the name to your firm. It is always best to only do it with business-related items though, office furniture, office supplies, computers, etc. Not with household items or gifts for your mistress.

 

[gismor]

One simple solution is to photocopy the invoice and change the name to your firm. It is always best to only do it with business-related items though, office furniture, office supplies, computers, etc. Not with household items or gifts for your mistress.

Yes, frankly I thought about it. My main purpose would be for the rent of the apartment/office and purchase of computers... But probably is not worth taking the risks, although it should be extremely unlikely that a company generating less than 200k a year in revenue gets audited and they do a cross check with invoices from a foreign country